PREVENTING EMBEZZLEMENT AT BARS HARD TO DO

This was submitted by one of our younger, brilliant accountants.  His name is Danny.  I agree with his opinion.

Preventing embezzlement in a bar....

....is difficult.  Consider the environment in a bar:  lots of cash, loud music, alcohol, wild behavior, impatience, etc.  The setup is perfect for embezzlement.  It is easy to reclassify embezzled money as a tip and employees would only want to report tips up to the minimum wage limit to avoid paying tax.

Danny says:  To stop embezzling at a bar may be a tough thing to do.  Keeping track of one's tips is not an easy task.  In the past I worked for tips and the employer actually had an electronic device in which the employees used to record tips.  The problem with this is that employees would only record their tips up to the minimum wage and pocketed the rest of the money.  This may be one way to track the tips, but certainly does not ensure anything close to 100% accuracy. 

Of course, the only 100% fool proof way is to hire 100% honest people...in a bar?  Hmmm.....

One suggestion is to have a locked container under the bar into which the tips go.  The manager has the key and is the one that counts the tips, records them and divides them equally.  "Tip sharing" on an equal basis may help prevent embezzlement but probably does nothing for employee morale.

I'm going to give this a little more thought and see what else I can come up with......any ideas?

Comments

[Lou]

I don't have any ideas. It's hopeless. Sorry. :(

[Jules]

I must be missing something on this question. Why would the owner/manager care whether employees are reporting all of their tips? Isn't it the employee's responsibility to correctly report their income, not the owner/manager?

Also, what is meant by embezzelment in a bar situation? It's been a long time since I worked for tips.

[The Naked Accountant]

I am so glad that you responded to this post. Thank you. Ever since I posted it, something has bugged me AND I got it when I read your comment. My employee wrote the blog and I posted it before the "thing" that bugged me surfaced.
The blog that I wanted written was about how easy it is to pocket money when you work at a bar because as the night progresses, more and more people pay cash for their drinks and THIS cash is easily pocketed as well as the larger & larger tips. Imagine this drill in an extremely popular bar.....so, the essence of the blog should have been less about tips (IRS has really cracked down...)and more about a very "white collor type" of embezzlement.
Thanks again...it is readers like you that keep meon track.
Jean